PUEBLA, Mexico - The Volkswagen New Beetle is being assembled here in a plant that was the joke of the industry only five years ago.
The entire workforce was fired; new Golf and Jetta models were a year late; initial quality problems were nearly double the industry average.
Today, quality studies indicate Volkswagen de Mexico has made great progress.
Besides building the New Beetle, the plant builds the old Beetle, Jetta, Golf and Cabrio.
The New Beetle itself is hugely popular in the USA, and VW believes it will help sell Jettas, Golfs, Cabrios and Passats.
Puebla-built cars scored 95 problems per 100 cars in the J.D. Power and Associates 1997 Initial Quality Study. That was above the industry average of 86 problems per 100 cars, but well below the 1993 score of 226 problems.
'They have been improving at a faster rate than the industry, but they also had a longer way to go,' said Chance Parker, director of product research at J.D. Power in California.
Volkswagen has set a goal of 65 or fewer problems per 100 cars.
Werner Uhle, director of quality control management in Puebla, said the quality of Puebla-built cars is very similar to the quality of cars built in Wolfsburg.
'It is very important for Volkswagen to have the same level of quality around the world,' Uhle said.
The turnaround at the plant began soon after Ferdinand Piech became Volkswagen AG chairman on 1 January 1993. He demanded quality improvement in Puebla, and he visited the plant frequently.
Among the changes:
Workers receive cross-training on several jobs
Communication between Wolfsburg and Puebla improved dramatically
Germans replaced Mexicans in many key management positions.
The Puebla plant hit rock bottom in 1992. The Golf and Jetta lost a model year of sales.
Volkswagen's attempts to adopt Japanese-style work practices in Puebla led to a bitter union fight. When it was all over, the government granted Volkswagen's request to cancel its collective bargaining agreement with 14,000 workers.
In rehiring its workforce, VW rid itself of workers it considered a problem and began a program to improve productivity.
Annual production at Puebla will reach a rate of 430,000 by the end of this year. The plant may be able to crank up production to 450,000 by 2000.